Equity benchmark Sensex slumped over 400 points in early trade on Wednesday dragged by losses in index-heavyweights HDFC twins, ICICI Bank and Infosys amid a negative trend in global markets and sustained foreign fund outflow.
The 30-share index was trading 417.45 points or 0.69 per cent lower at 60,016 in initial deals. Similarly, the Nifty fell 122. 10 points or 0.68 per cent to 17,922.15.
Tata Steel was the top loser in the Sensex pack, shedding around 2 per cent, followed by HDFC, ICICI Bank, Kotak Bank, HUL and Asian Paints.
On the other hand, M&M, Sun Pharma, Tech Mahindra, ITC and Dr Reddy’s were among the gainers.
In the previous session, Sensex ended 112.16 points or 0.19 per cent lower at 60,433.45 and the Nifty fell 24.30 points or 0.13 per cent to 18,044.25.
Foreign institutional investors (FIIs) were net sellers in the capital market, as they offloaded shares worth Rs 2,445.25 crore on Tuesday, as per exchange data.
Even though the market appears resilient, the bulls are facing a major headwind in the form of sustained selling by FIIs, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"The 'buy-on-dips' strategy of retail investors and domestic institutional investors (DIIs) is countered with the 'sell-on-rally' strategy of FIIs. This tug of war between retail/DII vs FIIs is likely to continue in the short run.
"If the global environment for equity turns weak, accelerated selling by FIIs can trigger a minor short-term correction in the market," he noted.
Further, he added that the highlight of the day's session is likely to be the listing and trading of Nykaa.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with losses in mid-session deals. Major indices on Wall Street ended on a negative note in the overnight session.
Meanwhile, international oil benchmark Brent crude rose 0.40 per cent to USD 85.12 per barrel.